Thursday, August 07, 2014

In a post I will do in a day or so Steven Brill notes what we always knew (and Obama sold as a way to help cut deficit rather than being truthful): Obamacare really is a massive new government income-redistribution program providing health insurance, through subsidies and the expansion of Medicaid, to millions of people who could not otherwise afford it. He also notes that across the country, 87% of all those who bought insurance on the exchanges got subsidies, while everyone who got added to the Medicaid rolls got coverage for free.

Almost 90% of the nation's 30 million uninsured won't pay a penalty under the Affordable Care Act in 2016 because of a growing batch of exemptions to the health-coverage requirement.

The architects of the health law wanted most Americans to carry insurance or pay a penalty. But an analysis by the Congressional Budget Office and the Joint Committee on Taxation said most of the uninsured will qualify for one or more exemptions.

Daphne Gaines expects to be one of them. She said recently she got an electricity shut-off notice, which is one way Americans can get out of paying a fine. "I don't think I should have to pay any penalty," said Ms. Gaines, 52 years old, of Jasper, Ala., who works part time at a church preschool and a drug-recovery clinic.

The Obama administration has provided 14 ways people can avoid the fine based on hardships, including suffering domestic violence, experiencing substantial property damage from a fire or flood, and having a canceled insurance plan. Those come on top of exemptions carved out under the 2010 law for groups including illegal immigrants, members of Native American tribes and certain religious sects.

The exemptions are worrying insurers. The penalties were intended as a cudgel to increase the number of people signing up, thereby maximizing the pool of insured. Insurers are concerned that the exemptions could make it easier for younger, healthier people to forgo coverage, leaving the pools overly filled with old people or those with health problems. That, in turn, could cause premiums to rise.

The Obama administration argued before the Supreme Court in 2012 that the individual mandate was an essential component of the law's insurance-market changes, and the court narrowly upheld it on the grounds it is a tax. Now, Republicans who oppose the law say the administration has undermined that requirement with the exemptions and should waive the mandate entirely.

"If your pajamas don't fit well, you don't need health insurance," said Douglas Holtz-Eakin, former director of the Congressional Budget Office and president of the American Action Forum, a conservative think tank. "It basically waives the individual mandate."